California budget fix stalls with too few GOP votes

SACRAMENTO, Calif. (AP) — Gov. Arnold Schwarzenegger tried Sunday to salvage a proposal to close California’s $42 billion deficit after an all-night legislative session failed to produce a new budget.

The governor and legislative leaders from both parties warned that California faces insolvency unless the Legislature enacts a midyear budget fix.

Blame for the inaction was fixed on the state Senate, where Republicans were refusing to put up the three votes necessary to reach the required two-thirds majority. The Assembly appeared ready to pass the mix of deep spending cuts and tax increases but was awaiting signals that the Senate would do the same.

After meeting all night, both chambers called recesses Sunday morning so lawmakers could nap and shower.

The Senate resumed budget debate Sunday afternoon, though there was no indication it had the votes to adopt the spending plan. The Assembly was still in recess Sunday afternoon.

“I don’t know what it takes for people to believe this really is a crisis,” said Senate Budget Committee chair Denise Ducheny, D-San Diego. “Maybe with a little sleep folks will appreciate the fact the governor and the leaders and many of us believe we have a budget.”

The budget crisis is dire: tax refund checks and payments to state vendors have been delayed; some 2,000 public works projects have been stopped because the state has no money to pay for them; and California’s credit rating is so bad the state can’t get loans.

Schwarzenegger, meanwhile, has ordered furloughs for state government workers and has threatened layoffs for as many as 10,000.

“The only alternative now is to literally go insolvent and over the cliff, and many of us believe that is irresponsible and giving up our constitutional responsibilities,” said Assembly Minority Leader Mike Villines, a Republican.

The Assembly and Senate approved the relatively noncontroversial bills in the package late Saturday night, but action stalled early Sunday morning with the tax votes still to come.

The hang-up came in trying to reach the required two-thirds majority in each house, where three Republican votes are needed. The Assembly appeared to have sufficient votes lined up, but the Senate was falling one short.